US May CPI Overview
Tuesday's US economic docket highlights the release of latest consumer inflation figures and is due for release later during the early North-American session, at 1230GMT. The headline CPI is expected to have risen by 0.2% m/m in May, lifting the yearly rate to 2.7%. Meanwhile, core CPI, which excludes volatile food and energy prices, is also expected to have ticked higher to 2.2% y/y.
How could it affect DXY?
A positive surprise might revive hopes for an aggressive Fed monetary policy tightening cycle and lift the key US Dollar Index back towards the 94.00 handle, which is followed by late May highs resistance near the 94.45 level.
However, a softer reading might not be enough to change the broader USD uptrend and hence, the downside could be limited by support near the 93.20 region and the 93.00 round figure mark.
Key notes
• US CPI amongst market movers today – Danske Bank
• US inflation preview: A small change in CPI can trigger a big move for USD and the Fed
About the US CPI
The Consumer Price Index released by the US Bureau of Labor Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchasing power of USD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or Bearish).
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